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The Federal Trade Commission today announced final rules and guidelines that will promote the accuracy and integrity of information provided to credit reporting agencies (commonly called “credit bureaus”) and allow consumers to dispute inaccurate information about them directly with furnishers, the financial institutions and other entities that furnish the information to the credit reporting agencies. Information in credit reports is used widely to determine a consumer’s eligibility for credit, employment, insurance and rental housing, and errors in a consumer’s report can result in denial of those benefits or higher costs.

The FTC is issuing these rules and guidelines with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision (the Agencies) under section 312 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which amends the Fair Credit Reporting Act. The effective date for these final rules and guidelines is July 1, 2010.

The Accuracy and Integrity Guidelines and Rules

The Agencies have issued guidelines specifying the actions for furnishers to take to ensure the accuracy and integrity of the information they furnish to credit reporting agencies, as well as rules requiring each furnisher to establish reasonable policies and procedures for implementing the guidelines. For example, the guidelines provide that, under circumstances specified by the Agencies, furnishers should report certain additional information when necessary to keep information they report from creating a misleading impression about a consumer’s creditworthiness. The guidelines specify one such circumstance – furnishers generally would need to include a consumer’s credit limit among the information they furnish to a credit reporting agency. The Agencies today are issuing an Advance Notice of Proposed Rulemaking to identify other possible information that furnishers should report, such as the date the account was opened.

The Direct Dispute Rules and FDCPA Advisory Opinion

The Agencies also have issued final rules requiring furnishers in most cases to investigate disputes that consumers submit directly to them regarding the accuracy of information that the furnishers reported to a credit reporting agency. Previously, the law encouraged consumers to submit their disputes through a credit reporting agency, rather than directly to a furnisher. The final rules add an additional avenue for consumers to dispute possible credit report inaccuracies, but do not remove or change consumers’ existing right to file a dispute through a credit reporting agency.

In an action related to the direct dispute rule, the Commission is issuing an advisory opinion concluding that a debt collector does not violate the Fair Debt Collection Practices Act by responding to a direct dispute via a communication whose sole purpose is to comply with the direct dispute rule by stating either the results of the investigation or the collector’s belief that the communication is frivolous or irrelevant. Section 805(c) of the Act provides that, if a consumer has notified a debt collector in writing to stop communicating with the consumer, the collector must stop communicating with the consumer about the debt. The advisory opinion clarifies that, even if a consumer has asked a debt collector to stop communicating about a debt, the debt collector must still respond to the consumer’s direct dispute, as required by the new rules.

The final rules and guidelines, which will be published soon in the Federal Register, are attached. The Commission vote to issue the rules and guidelines was 4-0.